7 ways to lower your car insurance rate

A man in a suit pressing a hovering graphic of a car.

Driving is fun, but paying for it sure isn’t. With insurance costs climbing upwards, many people are trying to find ways to lower their insurance premiums. Are you looking for fast and easy ways to lower your car insurance rate? Here are seven tips.

1. Change vehicles

This isn't the most practical advice, but it does have merit. If you’re driving an expensive luxury car, chances are your insurance rates are sky-high. Selling or trading the car in for one that’s less expensive to repair and less likely to be stolen will lower your car insurance rate. Your monthly car costs will be less too! But of course, downgrading isn't something many people leap at the chance to do.

2. Increase your deductible

Increasing your deductible (the amount of money for which you’re responsible for in the event of a claim) shows the insurance company you’re unlikely to make a claim, unless you have a lot of damage. If, for example, you increase your car insurance deductible to $5,000, you won’t claim a small fender bender, saving the insurance company money that it can pass on to customers in the form of lower premiums.

3. Shop around

Although some insurance companies offer loyalty discounts, these discounts might not be large enough to offset lower premiums elsewhere. Shop around for a new policy at least once a year to make sure you’re getting a great deal that is right for you.

4. Show responsibility

Little things like a driver’s education course, using winter tires, purchasing an alarm or dash cam and parking your car in a garage could lower your car insurance rate. These acts show the insurance company that you’re responsible and willing to go above and beyond to protect your vehicle.

5. Drop collision

If you’re driving an old car, or one that has a low value, consider dropping collision insurance. In the event of an accident, damage to the other driver will be covered under your insurance, but damage to your vehicle will not be. While this might not sound ideal, remember that you're unlikely to invest a lot of money into a vehicle that has little monetary worth. More likely, you'd just buy a new vehicle. 

6. Pay your premium in advance

Although policies vary by company, some companies will offer discounts if you pay your entire premium up front and in advance. By making a lump sum payment instead of a monthly payment, you could lower your car insurance rate without changing your insurance or car. An advanced payment is just one of several ways to negotiate the price of your insurance.

7. Drive less

Common sense dictates that the more you drive, the more likely you are to get into an accident. By reducing the number of kilometres you drive on an annual basis, you can lower your car insurance rates. This can be achieved by moving closer to work, getting a new job or commuting via public transit, carpooling or bike riding.

People have all sorts of reasons for wanting to lower their car insurance rates. For some, the need to save money trumps all and they’d be willing to make lump sum payments, drop collision coverage and get a new (cheaper) car. For others, the idea of not driving a new or luxurious car is a non-starter. Thankfully, there are multiple ways to lower your car insurance rate, so you can pick and choose the ones that work best for your lifestyle.

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